Under the welfare reform regime established in 1996, states were basically required to engage 50% of their caseload--mainly single mothers--in some kind of "work activity" (workfare, job search, training, etc.). But there was a problem with this half-the-caseload requirement: What about would-be recipients who got off the rolls
entirely
when the states found jobs for them--or who were diverted into jobs before they ever signed up for welfare? Shouldn't states be able to count these "successes" toward the 50% requirement? You wouldn't want to give states an incentive to somehow keep these people on welfare in order to count them. Thus was born the "caseload reduction credit," which let states count the net decline in their caseloads against the 50% work requirement.

Fair enough. But because caseloads declined dramatically after 1996--they've gone down by two-thirds--the "caseload reduction credit" effectively absolved many states of the requirement to get half of their caseloads working. When Congress reauthorized welfare reform it updated the baseline to 2005. States could still take the credit for any reductions
after
that date. Many did so, as caseloads continued to fall.

Now, though, Congressional Democrats want to encourage states to
expand
their caseloads, offering billions of federal dollars in the "stimulus" package as an incentive to do so.
But wait, if states expand their welfare caseloads as the Dems want, they'd lose the "caseload reduction credit," since their caseloads would not, in fact,
have been reduced.
They might then have to start enforcing the "work activity"
requirements on those caseloads. Can't have that!
That might discourage states from expanding welfare, for one thing, since enforcing work requirements costs money, and states have no money. And Congressional Money Liberals** never liked work requirements much in the first place. The last thing they want to do is increase them. (Their whole theory is that the many single-mom recipients are "hard-to-employ" types with "multiple problems" who basically need to be supported on the dole.) What's a good Money Liberal to do?

Answer
: Rewrite the law, in the stimulus package, to
let states expand their caseloads but pretend, for "caseload reduction credit" purposes, that the caseloads have
declined
.
Specifically, the
revision
would allow states take the credit they would have gotten based on their caseloads in 2007 or 2008 even if their caseloads soar (as the Dems would like) in 2009 and 2010.

In other words, they can expand their caseloads but still use the now-fictitious "reduction credit" to avoid the law's work requirements.

The major difference between the House and Senate versions of this deeply troubling provision, apparently, is that the Senate allocates only $3 billion to induce states to expand their caseloads, while the House bill might spend more than twice as much.

P.S.:
On
bloggingheads
my colleague Bob Wright routinely ridiculed me as paranoid for worrying that if Democrats got back in power they would unravel welfare reform. Even I thought I was paranoid. If only for political purposes, I figured, Dems would have to wait a few months or years before sabotaging Bill Clinton's major domestic achievement. It took them two weeks. ...

**--By "Money Liberals" I mean
liberals who define the equality they seek entirely in economistic terms
. Confronted with the indignity of poverty, Money Liberals seek to end it by the simple expedient of sending cash to the poor. Money Liberalism, in this definition, ignores non-material distinctions, like those between those who work and those who don't, that (in an alternative, more Clintonian view) are fundamentally bound up in our ideas of dignity and civic respect (i.e. social equality). Specifically, an able-bodied person who fails to work and relies instead on the dole
can't
have full respect in our society, and shouldn't. The attempt to confer equal respect by spreading around cash--as opposed to guaranteeing work, and making work pay--is doomed. (More
here
, esp. the exciting footnote 2 on page 192).
3:05 P.M.